Good morning, Term Sheet readers.
U.S. cryptocurrency exchange Coinbase will acquire a firm that owns Keystone Capital Corp., Venovate Marketplace, and Digital Wealth, in a bid to become a fully SEC-regulated broker dealer. Keystone Capital, a Cardiff, Calif.-based financial services firm, is a FINRA-registered broker-dealer, and it has licenses to operate as a registered investment adviser, as well as to run an alternative trading system.
Financial terms weren’t disclosed. Here’s what to know about this deal:
• This is huge for Coinbase because it could expand its business opportunities and allow it to market its services to institutional investors.
• Coinbase is positioning itself to offer both traditional equities and a broader range of blockchain-based securities.
• Coinbase President and COO Asiff Hirji said in a blog post: “Ultimately, we can envision a world where we may even work with regulators to tokenize existing types of securities, bringing to this space the benefits of cryptocurrency-based markets — like 24/7 trading, real-time settlement, and chain-of-title.”
• Hirji added that the acquisition serves as a step in further legitimizing the burgeoning cryptocurrency space. “We believe this will democratize access to capital markets for companies and investors alike, lowering costs for all participants and bringing additional transparency and inclusion to the ecosystem,” he wrote.
• My colleague Jeff John Roberts reports, “By carrying out the acquisition, Coinbase is poised to enjoy the same regulatory status as Keystone Capital. For this to occur, the regulatory authority FINRA must grant its approval, though a person familiar with the deal told Fortune this is likely to be a formality.”
Most importantly, this matters because SEC Chairman Jay Clayton made it clear yesterday that the agency won’t be bending the rules for cryptocurrency when it comes to defining what is or what isn’t a security. He emphasized that that tokens or digital assets used in that fundraising process are securities.
“If you have an ICO or a stock, and you want to sell it in a private placement, follow the private placement rules,” Clayton said. “If you want to do any IPO with a token, come see us.”
ATHENAHEALTH CEO OUSTED: Jonathan Bush, Athenahealth’s CEO and co-founder, resigned Wednesday following reports of inappropriate behavior. Bush’s resignation makes him at least the sixth CEO to lose his or her job in the context of an Elliott campaign.
My colleague Jen Wieczner got to know Bush back in 2014 when he was facing another hedge fund manager who was publicly shorting Athenahealth’s stock. “And by getting to know Bush I mean: I played drinking games with a shirtless Bush, witnessed him dress up in costume in front of his board and employees, and swam in a frigid lake with him—all in the name of reporting for my Fortune magazine profile, ‘Is Athenahealth CEO Jonathan Bush in a Bubble,” she writes.
From her story:
In stepping down from the company he founded more than two decades ago, Bush seemed to concede that the renegade elements of his personality that once served his entrepreneurial aims were now a liability in his leadership, saying, “It’s easy for me to see that the very things that made me useful to the company and cause in these past 21 years, are now exactly the things that are in the way.”
This one is worth your time. Read the full story here.
THE LATEST FROM FORTUNE...
• Google Employees and Investors Joined Forces to Demand More Diversity. Why Even That Novel Approach Failed. (by David Meyer)
• Why GM President Dan Ammann Is Leaving Lyft’s Board (by Kirsten Korosec)
• Maggie Timoney Becomes Heineken USA’s First Female CEO (by Jonathan Sperling)
• Podium, a Lehi, Utah-based customer communication platform for local businesses, raised $60 million in Series B funding. IVP led the round, and was joined by investors including Accel, Summit Partners, GV (formerly Google Ventures), and Y Combinator.
• Ironhorse Funding, a Beverly, Mass.-based specialty lender to motorcycle/powersports dealerships and finance companies, raised $30 million in funding. Investors include Crestline Investors Inc.
• OneLogin, a San Francisco-based provider of unified access management solutions, raised $22.5 million in funding. The investors were not named.
• FlyHomes, a Seattle-based online real estate brokerage services company, raised $17 million in funding. Andreessen Horowitz led the round, and was joined by investors including Shasta Ventures, Zulily and Mark Vadon.
• DocAuthority, an Israel-based data management company, raised $10 million in Series A funding. Raine Ventures led the round, and was joined by investors including Greycroft, ff Venture Capital, Differential VC, 2B Angels and Plus Ventures.
• LendStreet, an Oakland, Calif.-based online consumer debt restructuring and consolidation platform, raised $7 million in Series A funding. Prudential Financial, Inc and Radicle Impact co-led the round.
• Panorays, an Israel-based company that automates third party security management, raised $5 million in funding. Aleph led the round.
• Obligo Inc, a New York-based fintech startup, raised $5 million in seed funding. 83 North led the round, and was joined by investors including Entrée Capital, HFZ Capital, and Viola Credit.
• Packlane, a Berkeley, Calif.-based online manufacturer for customized packaging, raised $4 million in Series A funding. Breakout Capital led the round, and was joined by investors including Draper Associates.
• 10% Happier, a Boston-based meditation app company, raised $3.7 million in seed funding. Investors include Khosla Ventures, Trinity Ventures and Correlation Ventures.
• Xtraction Services, a Clermont, Fla.-based company specializing in CO2 extraction equipment, raised $2.8 million in funding. Archytas Ventures led the round, and was joined by investors including Quinsam Capital and Ollerhead Capital.
HEALTH AND LIFE SCIENCES DEALS
• Sirnaomics Inc, a Gaithersburg, Md.-based developer of RNAi therapeutics, raised $25 million in Series C1 funding. Yuexiu New Industrial Investment led the round, and was joined by investors including Sangel Biomedical Venture Capital, HuaKong Equity Investment and Qianhai Shenghui Investment.
PRIVATE EQUITY DEALS
• Battery Ventures agreed to acquire LDetek, a Canada-based manufacturer of gas chromatography instruments and online analyzers. Financial terms weren’t disclosed.
• Southern Motion Inc, which is backed by Gainline Capital Partners, agreed to acquire Fusion Furniture Inc, a maker of upholstered stationary furniture. Financial terms weren’t disclosed.
Marley Spoon, a Berlin-based meal subscription service, filed for a $53 million (70 million AUD) IPO in Australia. Read more.
• New Enterprise Associates acquired Paladina Health, a Denver-based provider of primary care clinics, from DaVita. Financial terms weren’t disclosed, but media reports peg the deal at approximately $100 million.
FIRMS + FUNDS
• Camber Creek, a Rockville, Md.-based venture capital firm, raised $30 million for its second fund.
• Priti Youssef Choksi joined Norwest Venture Partners as a partner. Previously, Choksi was at Facebook.
• White Oak Business Capital, Inc, an affiliate of White Oak Global Advisors, LLC, appointed David Mitchell to senior vice president and senior business development officer.
• Sweetwater Capital Partners named Gregg Parise a managing partner.
• Innovation Endeavors named Harpinder (Harpi) Singh a partner.
• Allos Ventures named David Kerr a managing director.